1. Field of the Invention
The present invention relates generally to electronic commerce. More specifically, the invention relates to methods and apparatuses for providing real time credit approval to an applicant online by obtaining data from an applicant, verifying and formatting the data so obtained in a manner that permits accessing the applicant""s credit report, and making an underwriting decision to grant or deny credit to the applicant in real time based on data from one or more credit bureau reports.
2. Relationship to the Art
With the advent of electronic commerce on the Internet, applicants have begun to expect decisions that have historically required a period of days or weeks to be made instantly when processed on line. Numerous transactions such as purchases of consumer goods, airline tickets, and movie tickets have been adapted for execution on line in a matter of seconds. What has not been perfected is the ability to make a credit decision and grant credit to a party on line in real time. (For the purpose of this specification, xe2x80x9cinstantxe2x80x9d or xe2x80x9creal timexe2x80x9d credit means within a short period of time within less than about five minutes.) As a result, virtually all Internet commerce to date requires some previously secured method of payment such as a credit card obtained by conventional means or other previously arranged payment source such as a bank account or electronic money.
One factor that has prevented Internet applicants from providing information and receiving instant approval for credit is the difficulty of interfacing with the various credit bureau databases (Equifax, Trans Union, and Experian). Personal information must be entered by a party authorized by the credit bureaus to communicate with the credit bureaus for the purpose of accessing credit bureau reports. Such information must be in exactly the correct form in order for an individual""s credit report to be retrieved. Another difficulty has been that the decision to grant credit carries with it significant risk and systems have not been successfully designed that can make a sufficiently reliable underwriting decision using data provided directly by an applicant.
Many credit card issuers provide applications on line that may be filled out by applicants. However, data from those applications must be entered manually into the credit card issuer""s system for processing before a credit report is obtained and an underwriting decision can be made. Other applicants may be preapproved by an existing card issuer""s system before an offer is made and accepted online. However, the underwriting process has not been sufficiently automated to allow a credit decision to be made in real time for an applicant who has entered personal data into an application system.
What is needed is a system and method for obtaining personal data from a credit applicant, parsing the data into a format that is compatible with that used by the credit bureaus, obtaining credit bureau information and making an underwriting decision in real time. Such a system would be useful for conveniently obtaining a credit card on line. Automation of a process for obtaining a credit report and making an underwriting decision without human intervention would be beneficial because credit approval decisions could be made faster and more cheaply. The true power of such a system would be realized when the system is accessed in the midst of a transaction to obtain credit specifically for the purpose of that transaction.
The present invention provides a system and method for obtaining information from an applicant, accessing credit bureau information and making a real time underwriting decision to accept or reject the applicant. A parsing engine parses the information provided by the applicant so that it may be sent directly to a credit bureau. Information obtained from one or more credit bureaus is used by an underwriter engine to make a decision whether to grant credit to the applicant.
It should be appreciated that the present invention can be implemented in numerous ways, including as a process, an apparatus, a system, a device, a method, or a computer readable medium. Several inventive embodiments of the present invention are described below.
In one embodiment, a method of providing real time approval of credit over a network is disclosed. The method includes obtaining applicant data from an applicant. The applicant data is analyzed into a form suitable for directly obtaining a credit report from a credit bureau for the applicant. A credit report having credit report data is obtained from a credit bureau for the applicant. It is then determined whether to accept the applicant using the credit report data and it is communicated to the applicant that the applicant has been approved.
These and other features and advantages of the present invention will be presented in more detail in the following specification of the invention and the accompanying figures which illustrate by way of example the principles of the invention.